Background: Despite numerous advances made in improving child health and the clinical management protocols for treating severe acute malnutrition at treatment centers, evidences concerning the treatment outcomes are scarce. Therefore, this study was conducted to assess the recovery rate and associated factors of severely acute malnourished children of age 6 to 59 months admitted to inpatient therapeutic feeding unit at Felege Hiwot Referral Hospital. Methods: We conducted a hospital-based cross-sectional study including 401 severely malnourished children who were admitted from September 2012 to January 2016. Bivariable and a Multivariable logistic regression model were fitted to identify factors associated with recovery rate. Adjusted Odds ratio with its 95% CI was reported and P-value less than 0.05 was considered as significant. Results: Fifty eight percent (58.4%) (95%CI: 53.1-64.1) of admitted children were recovered with a mean recovery time of 18 (±6.3) days. Being female, children who were fully and partially vaccinated, who had better MUAC measurement, who stayed longer in the hospital, and children who took routine vitamin-A supplementation had better recovery rate. However, children who had co-morbidity at admission, had human immune virus (HIV) and Tuberculosis (TB) infection, and who had edema were less likely to recover. Interpretation: Recovery rate was low as compared to international SPHERE cutoff points (> 75% recovery rate). Interventions that could address the outlined factors would be helpful to improve treatment recovery rate of admitted children.